April 07, 2011 09:12 AM CDTApril 07, 2011 09:24 AM CDTAnalysis: North Texas Tollway Authority's plan to end its total reliance on its longest-tenured contractors will be tested by engineering, financial relationships

Analysis: North Texas Tollway Authority's plan to end its total reliance on its longest-tenured contractors will be tested by engineering, financial relationships

Today we might get a look at what NTTA plans to do about shaking up its reliance on the so-called legacy firms that have worked on the most sensitive, and often most lucrative, pieces of business for the authority for decades, and in some cases since the authority's predecessor agency was founded in 1953.

The staff is expected to present a proposal for how to rebid contracts for work as NTTA's general engineering consultant, its financial advisers, its traffic and revenue engineers and its bond counsel.

These roles, which have generated tens of millions of dollars in fees over time, have been occupied by the same core contractors for decades, including HNTB Corp., the massive engineering firm that occupies a large building across the parking lot from NTTA's Plano headquarters.

In October of 2009, we published a story that showed that these long-tenured relationships had been poorly managed, with staff often relying on the gold-plated firms to do work that could easily have been done in-house or by smaller, cheaper firms. We interviewed current and former employees and analyzed invoices, and found that NTTA was paying, for example, nearly $500,000 a year for routine maintenance engineers even though engineers doing similar jobs for state agencies were being paid about $75,000, plus benefits.

The idea was that NTTA could ramp up or ramp down its workforce at a moment's notice, and in return was willing to pay extra for that flexibility. But our work showed that for the great majority of these longest-serving contracts, NTTA's expansion over the past several years has meant a great deal more ramping up, than ramping down.

NTTA was paying through the nose for flexibility it rarely exercised.

All that got the attention of NTTA chairman Paul Wageman and newly hired executive director Allen Clemson, who each vowed to review both how the contracts were managed and to ensure they were put up for strenuous bid in 2010.

That proved easier said than done, however. The staff's early proposal to replace some of the biggest firms brought a backlash from the board, including Wageman, who believed the work had been shoddy and biased against the existing contractors. Wageman eventually led an effort to kill the procurements all together and lock into place the existing relationships until 2013.

That in turn raised the ire of many in the community, including Dallas County Commissoner John Wiley Price, who denounced the decision to protect the current contractors as the good-ole-boy network at its most blatant. It also helped convince Rep. Rafael Anchia. D-Dallas, to introduce a bill that would subject NTTA to Sunset Review by the Texas Legislature, something NTTA is working to avoid as the bill remains stalled in the House.

Meanwhile, NTTA Chairman Victor Vandergriff, who took over late last year, has reversed course, and already convinced his colleagues to break up the monopoly on legal work that had been the sole province of its outside general counsel, a Dallas firm that has represented NTTA or its predecessor, the Texas Turnpike Authority, since 1953.

The legal change-up wasn't easy: Compromises meant to preserve the critical role of attorney Frank Stevenson prompted general counsel John Dahill to resign.

But now the real fireworks — or at least the decisions with the most fiscal impact — are expected. At its most expensive, Stevenson's law firm billed about $7 million in legal fees — a pittance compared to the fees NTTA pays to its largest engineering firms.

It will be how it handles competing out the work now done by those firms, with their tentacles so deeply wormed into the authority's operations, that will test the wisdom of the course set forth by Vandergriff.

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